1992 Policies vs. 2006 Policies
1992 Policies vs. 2006 Policies
While some of the coverage of the 1992 forms is derived from appellate courts’ interpretations of the exceptions to the exclusions contained in the 1992 forms, an insured could not always rely on the concept that two negatives make a positive to create such coverage because of the maze of conflicting and confusing case law. The 2006 forms clearly set forth what is covered in positive and affirmative language. The forms provide coverage for losses resulting from, for example, recorded notices of violations of governmental laws or regulations and exercises of governmental police power and eminent domain.
A very important additional coverage is the broader definition of “Insured” so that under certain circumstances, successors to the named insured will be covered, removing the necessity of obtaining new policies or endorsements. Examples of situations where additional endorsements are not necessary in under the 2006 form are (a) when a partnership or limited liability company is reorganized, (b) when an individual transfers property to a family trust, (c) when there is a successor owner by merger or reorganization, and (d) when there is a successor named insured by conversion to another entity. However, because the 2006 form still reserves all rights against the predecessor insured and because some voluntary transfers are NOT included in the expanded definition of “insured” it is still good practice to request a non-imputation endorsement addressing this issue.
The 2006 loan form clarifies that coverage, including mechanics lien coverage, extends to all future advances under a construction loan. Additionally the new form provides express coverage for post-closing advances under a loan; however, endorsements are still needed to ensure validity, enforceability and priority of the lien of the insured mortgage as security for post-closing advances.
stated at the end of last weeks “Title Tip” This new form is easier for our
customers and our insured to read and understand, along with the added and
In order to make this an easier situation for you, our customers, we at Benchmark Title are only issuing the 2006 forms. As a matter of information, the ALTA has officially decertified the 1992 forms.
Any questions can be directed to Benchmark Title at 618-239-3750. Please feel free to call or email:
Dates to Remember
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